M/s Controlla Electrotech Pvt. Ltd., Lucknow V. The DCIT, Cen. Cir-XXI, Kolkata, Kolkata

ITA 1491/KOL/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 9134 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 8 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2017
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 04-07-2014
• Court: TRIBUNAL
• Department Lawyers: MD GHAYAS UDDIN
• Assessee Lawyers: PARNASHREE BANERJEE
• Keywords: Validity of assessment; Accommodation entries; Assessment record
• Section: 148

Judgement Text

I.T.A. NO. 1491/KOL./2014 ASSESSMENT YEAR: 2008-2009 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA B(SMC) BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER I.T.A. NO. 1491/KOL/ 2014 ASSESSMENT YEAR: 2008-2009 M/S. CONTROLLA ELECTROTECH PVT. LIMITED,........... .....................APPELLANT Y-10, SECTOR-V, EP BLOCK, ELECTRONIC COMPLEX, SALT LAKE CITY, KOLKATA-700 091 [PAN: AABCC 1029 K] -VS.- DEPUTY COMMISSIONER OF INCOME TAX,................ ...................RESPONDENT CENTRAL CIRCLE-XXI, KOLKATA APPEARANCES BY: SMT. PARNASHREE BANERJEE, ADVOCATE, FOR THE ASSESSEE MD. GHAYAS UDDIN , JCIT, D.R., FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : MARCH 31, 2017 DATE OF PRONOUNCING THE ORDER : MARCH 31, 2017 O R D E R THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS), CENTRAL-II, K OLKATA DATED 27.06.2014. 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY, W HICH IS ENGAGED IN REAL ESTATE BUSINESS. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY IT ON 29.09.2008 DISCLOS ING TOTAL INCOME AT NIL. ALTHOUGH THE SAID RETURN WAS INITIALLY PROCE SSED BY THE ASSESSING OFFICER UNDER SECTION 143(1), THE ASSESSMENT FOR TH E YEAR UNDER CONSIDERATION WAS SUBSEQUENTLY RE-OPENED BY HIM BY ISSUING A NOTICE UNDER SECTION 148 ON 26.03.2013 AFTER RECORDING THE REASONS. IN THE ASSESSMENT COMPLETED UNDER SECTION 147/144 VIDE AN ORDER DATED 24.03.2014 IN PURSUANCE OF THE SAID NOTICE, A SUM O F RS.37,282/- WAS BROUGHT TO TAX BY THE ASSESSING OFFICER IN THE HAND S OF THE ASSESSEE ON I.T.A. NO. 1491/KOL./2014 ASSESSMENT YEAR: 2008-2009 PAGE 2 OF 4 ACCOUNT OF UNACCOUNTED COMMISSION PAID TO ONE SHRI KEJRIWAL FOR PROVIDING ACCOMMODATION ENTRIES. 3. AGAINST THE ORDER PASSED BY THE ASSESSING OFFICE R UNDER SECTION 147/144, AN APPEAL WAS PREFERRED BY THE ASSESSEE BE FORE THE LD. CIT(APPEALS) CHALLENGING THEREIN THE VALIDITY OF AS SESSMENT MADE BY THE ASSESSING OFFICER AS WELL AS DISPUTING THE ADDITION OF RS.37,282/- MADE THEREIN ON MERIT. THE LD. CIT(APPEALS), HOWEVER, DI D NOT FIND MERIT IN THE SAID APPEAL AND DISMISSED THE SAME BY FOLLOWING ORD ERS OF HIS PREDECESSOR IN ASSESSEES OWN CASE FOR THE IMMEDIAT ELY PRECEDING TWO YEARS, I.E. A.Y. 2006-07 AND 2007-08, WHEREIN THE A SSESSMENTS WERE RE- OPENED ON IDENTICAL GROUNDS AND SIMILAR ADDITION WA S MADE TO THE TOTAL INCOME OF THE ASSESSEE. AGGRIEVED BY THE ORDER OF T HE LD. CIT(APPEALS), THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE T RIBUNAL. 4. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. AS REGARDS T HE PRELIMINARY ISSUE RAISED IN THIS APPEAL OF THE ASSESSEE CHALLENGING T HE VALIDITY OF ASSESSMENT MADE BY THE ASSESSING OFFICER UNDER SECT ION 147/144, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT A SIMIL AR ISSUE WAS INVOLVED IN THE CASE OF THE ASSESSEE FOR A.Y. 2006-07 AND 20 07-08, WHEREIN THE ASSESSMENTS WERE REOPENED BY THE ASSESSING OFFICER AFTER RECORDING THE IDENTICAL REASONS AND THE TRIBUNAL VIDE ITS COMMON ORDER DATED 09.09.2014 PASSED IN ITA NOS. 1443 & 1444/KOL/2014 HAS DECIDED THE SAME IN FAVOUR OF THE ASSESSEE HOLDING THAT THE REO PENING ITSELF BEING BAD IN LAW, THE ASSESSMENTS MADE BY THE ASSESSING OFFIC ER FOR A.Y. 2006-07 AND 2007-08 WERE INVALID. SHE HAS ALSO PLACED ON RE CORD A COPY OF THE SAID ORDER AND PERUSAL OF THE SAME SHOWS THAT A SIM ILAR ISSUE INVOLVED IN ASSESSEES OWN CASE FOR A.YS. 2006-07 & 2007-08 HAS BEEN DECIDED BY THE TRIBUNAL IN FAVOUR OF THE ASSESSEE FOR THE FOLLOWIN G REASONS GIVEN IN PARAGRAPH NO. 6 & 6.1 OF ITS IMPUGNED ORDER:- 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PE RUSAL OF THE ASSESSMENT ORDER, WHEREIN THE REASONS HAD BEEN RECO RDED FOR REOPENING, CLEARLY SHOWS THAT THE REOPENING HAS BEE N DONE ONLY I.T.A. NO. 1491/KOL./2014 ASSESSMENT YEAR: 2008-2009 PAGE 3 OF 4 ON THE BASIS OF THE STATEMENT AND DISCLOSURE PETITI ON FILED BY SHRI SURESH KEJRIWAL. THIS SO-CALLED STATEMENT AND DISCLOSURE ARE THE FOUNDATION ALONG WITH THE APPRAISAL REPORT. AT THE OUTSET, A PERUSAL OF THE STATEMENT FROM SHRI KEJRIW AI SHOWS THAT THIS IS THE STATEMENT TAKEN IN THE COURSE OF SURVEY . THIS STATEMENT LOOSES ITS EVIDENTIARY VALUE IN SO FAR AS THE STATEMENT RECORDED IN THE COURSE OF SURVEY HAS NO CONCLUSIVE EVIDENTIARY VALUE. IT IS NOT RECORDED UNDER OATH. NO OATH HAS B EEN ADMINISTERED. THE VERY FOUNDATION OF THE APPRAISAL REPORT AND THE REOPENING FAIL BECAUSE OF THIS PRIMARY DEFECT. ASSUMING, WE ARE GIVING EVIDENTIARY VALUE TO THIS STATEMENT, IN QUESTION NO.3 IN THE STATEMENT AS HAS BEEN SPECIFIED BY THE ID. C IT,DR, LIST OF THE MAIN PARTIES TO WHOM THE SAID ACCOMMODATION ENT RIES HAD BEEN PROVIDED BY SAKET VINIMAY.PVT. LTD. HAS BEEN L ISTED OUT 13 IN NUMBER. WHEN THESE NAMES ARE COMPARED WITH THE C HART IN THE ASSESSMENT ORDER, WINCH IS SPECIFYING THE REASO NS FOR REOPENING, SHOWS THAT MANY OF THE NAMES IN THE LIST TALLIED WITH THAT IN THE CHART BUT THE ASSESSEE'S LOAN AMOUNT IS THE HIGHEST. OBVIOUSLY, ASSESSEE'S NAME MUST BE THE MAIN PERSON THAT SHRI SURESH KEJRIWAL WOULD HAVE REMEMBERED, AS THE ASSES SEE IS THE PERSON TO WHOM SUCH A HUGE LOAN HAD BEEN EXTENDED. BUT THE ASSESSEE'S NAME IS CONSPICUOUS BY ITS ABSENCE IN TH AT LIST. THUS, THE REFERENCE TO THE STATEMENT RECORDED FROM SHRI K EJRIWAL FOR THE PURPOSES OF REOPENING IN THE CASE .OF THE ASSES SEE AGAIN FAILS WITHOUT A FOUNDATION, AS THE ASSESSEE'S NAME IS NOW HERE REFERRED TO IN THE STATEMENT RECORDED ON THE CONFES SIONAL DISCLOSURE. SIMILARLY, EVEN IF AN ATTEMPT TO PROTEC T THE REOPENING IS MADE BY REFERENCE TO THE DISCLOSURE MADE BY SHRI KEJRIWAL EVEN THERE, THERE IS NO REFERENCE TO THE ASSESSEE. THUS, PRIMA FACIE, THERE IS NO LIVE LINK NOR DIRECT NEXUS TO TH E STATEMENT OF SHRI KEJRIWAL OF HAVING PROVIDED ANY ACCOMMODATION ENTRY TO THE ASSESSEE BEFORE US. ON THIS GROUND ITSELF, THE REOPENING IS LIABLE TO BE HELD TO BE BAD IN LAW AND WE DO SO. 6.1. COMING TO THE IMPROVEMENT TO THE REASONS RECO RDED, AS HAS BEEN ALLEGED BY THE ID. AR BY REFERRING TO THE LETTER OF THE AO DATED 06.12.2013, WE ME UNABLE TO GIVE ANY SUPPO RT TO THE REOPENING IN SO FAR AS SUCH COMPUTER EXTRACT IS NOT FOUND IN THE ASSESSMENT RECORDS NOR HAS IT BEEN PLACED BEFORE US . EVEN OTHERWISE, THE DECISION OF THE HON'BLE KOLKATA HIGH COURT IN THE CASE OF EQUITABLE INVESTMENT CO. (P) LTD. REFERRED TO SUPRA, CLEARLY HOLDS IN FAVOUR OF THE ASSESSEE IN SO FAR A S ONLY SUCH REASONS RECORDED FOR OBTAINING THE SANCTION FOR THE PURPOSES OF REOPENING IS THE ONLY DOCUMENT WHICH CAN BE CONSIDE RED. THIS VIEW IS ALSO SUPPORTED BY THE DECISION OF THE HON'B LE SUPREME COURT IN THE CASE OF LAKHMANI MEWAL DAS, REFERRED T O SUPRA. THUS, ON ALL THE ABOVE GROUNDS, IT IS HELD THAT REO PENING OF ASSESSMENT IN THE CASE OF THE ASSESSEE FOR BOTH THE ASSESSMENT YEARS STAND CANCELLED AND CONSEQUENTLY, THE ASSESSM ENT ORDERS I.T.A. NO. 1491/KOL./2014 ASSESSMENT YEAR: 2008-2009 PAGE 4 OF 4 PASSED FOR BOTH THE ASSESSMENT YEARS AS A CONSEQUEN CE OF SUCH REOPENING ALSO STAND CANCELLED. 5. THE PRELIMINARY ISSUE INVOLVED IN THE CASE OF TH E ASSESESE FOR A.Y. 2008-09 THUS IS SQUARELY COVERED IN FAVOUR OF THE A SSESSEE BY THE ORDER OF THE DIVISION BENCH OF THIS TRIBUNAL DATED 09.09.201 4 PASSED FOR A.Y. 2006-07 AND 2007-08 AND THIS POSITION CLEARLY EVIDE NT FROM THE RELEVANT RECORD PLACED BEFORE ME IS NOT DISPUTED EVEN BY THE LD. D.R. I, THEREFORE, RESPECTFULLY FOLLOW THE SAID DECISION OF THE TRIBUN AL AND CANCEL THE ASSESSMENT MADE BY THE ASSESSING OFFICER UNDER SECT ION 147/144 FOR THE YEAR UNDER CONSIDERATION BY TREATING THE SAME AS IN VALID. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON MARCH 31, 201 7. SD/- (P.M. JAGTAP) ACCOUNTANT MEMBER KOLKATA, THE 31 ST DAY OF MARCH, 2017 COPIES TO : (1) M/S. CONTROLLA ELECTROTECH PVT. LIMITED, Y-10, SECTOR-V, EP BLOCK, ELECTRONIC COMPLEX, SALT LAKE CITY, KOLKATA-700 091 (2) DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-XXI, KOLKATA (3) COMMISSIONER OF INCOME TAX (APPEALS), CENTRAL- II, KOLKATA; (4) COMMISSIONER OF INCOME TAX- , (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.